Cover Stories Doing Well By Doing Good; Founder Martin Muoto Discusses SoLA Impact and Its Initiative to Empower and Create Intentional Change
SoLa Impact is a family of social impact real estate funds with a strategy focused on preserving, refreshing, and creating high-quality affordable housing in low-income communities. With a proven track record that leverages data-driven social impact strategies, they’ve delivered superior financial overturns, as well as made monumental strides in the progression and well-being of the city of Los Angeles, along with its people.
In an interview with SoLa’s Founder and Managing Partner, Martin Muoto, he discussed the genius that brought about SoLa Impact as well as the goals that he and his company have to provide for the community.
“SoLa is a for-profit company that ensures that the community sees the benefit and the residency of the benefits,” said Muoto. “I think that more and more companies realize that you can’t just extract value out of society. You have to do something that grows the pie.”
Muoto grew up in West Africa where people usually greet each other with the motto, “I’m doing well if you’re doing well.” This has become an ethos of what SoLa’s trying to achieve.
“We want to do well, if our residents are doing well, and the community is doing well. I started this company with Gray Lusk, the co-founder, almost 12 years ago. I was using my own money to buy in South L.A., and everybody told me, ‘Well, why are you investing in South L.A.? You’re going to lose so much money.’ But I was like, ‘No, these are my people.’”
The founder continued, “I just was much more comfortable navigating South L.A. than many other investors would be, mainly because I’m a person of color, but also because I’m from West Africa, which was, like, really tough.”
SoLA is doing their part to make progress in the city with a large focus on Los Angeles’ current housing crisis.
“I don’t think people quite understand the level of crisis we’re in,” Muoto shared. “You know, it’s costing lives in the sense that people that can’t get housing, can’t get help, can’t get support services—whether it’s on Skid Row or Venice—and these folks are dying at a disproportionate level.”
Muoto has spent time reaching out to administrators and bureaucrats about the extent of LA’s current housing crisis, however, he has struggled in getting an immediate fix to the problem.
“This is a crisis! People are leaving California, and they’re leaving Los Angeles, because they can’t find housing, which I think is really for the economy and undermines the great California Experiment. However, to address this crisis, we have to have more affordable housing and a larger supply of it,” he stressed.
“When people look at homeless—they ask, ‘Is it a drug-related issue?’ But our view is that the root cause, when you look at all the variables, is that there’s simply not enough affordable housing in L.A., at least a shortfall of 500,000. So, we have to build a lot more affordable and workforce housing,” said the SoLa founder.
Muoto noted that, for SoLa, affordable housing would be up to an 80% of area median income, and then, workforce housing being from 80-120% of area median income.
They’ve found that oftentimes, people can afford $1,300-1,500 in rent per month, but can’t afford to spend $2,500 per month. While many nonprofit affordable housing developers have been the ones to go after this problem, usually with government money, Muoto described their work as “commendable.”
“In some respects, they’re trying, but have the wrong incentives. Government money, Triple H (HHH), and so on only results in homes and apartments being built at 500, 600, $700,000 a door. That’s fundamentally not affordable.
The government can come in and supplement, but if you’re making $40-50,000 per year, you shouldn’t be living in a $500,000 apartment. So, we’re building at $250,000 a door, and that makes it a lot more affordable,” Muoto said.
$250,000 is SoLA’s hard cost, but this includes soft costs, financing costs, indirect costs, land costs, and everything else. Their goal is to eventually get it under $200,000 a door, which Martin described as “difficult, especially in Los Angeles.”
SoLa Impact has also vowed to solely build their properties in Black and Brown communities because they believe that’s where the greatest need, as well as opportunity, is.
“That’s where we have a competitive advantage.
We believe that when building in Black and Brown communities, you have to do it with intention and with impact.
And that means really considering the needs of the community.
We don’t want to just put poor people in a congregated section of town—that’s just another form of segregation.”
SoLa is passionate about building affordable housing, workforce housing, along with other types of housing within Black and Brown communities, and their work will not stop there. Their work goes beyond housing, and now has breached into areas of education.
SoLa is made up of four pillars –affordable housing, access to education using technology, access to capital for Black and Brown entrepreneurs, and access to ownership, both business ownership and home ownership.
Recently, they’ve created a partnership with Ally Bank, who made a large contribution to their Pathways to Homeownership Program (a program that lets SoLa renters allow SoLa to take a part of their rent and escrow it.
Then over three-to-five years, the renter will have up to $50,000 towards a down payment for their first home).
“The concept is if you do certain things that homeowners are required to do—maintain and improve your credit, maintain or improve your job prospects, stay employed, and save a certain amount of money - we’ll take up to 10% of your rent and escrow it, and after three-to-five years, put it in your pocket,” explained Muoto.
Recently, SoLA Impact opened their new campus, The Beehive, the nation’s first campus for Opportunity Zone Business. The Beehive is comprised of 92,000 square feet of commercial space located only 10 minutes south of downtown L.A. With six unique and architecturally beautiful red-brick warehouses, this project was created to transform the local neighborhood and economy.
Muoto mentioned Los Angeles’ events, Black Market Flea and Everyday People, when asked why the opening was such a monumental event, not just for SoLa, but also the Los Angeles Black and Brown communities.
“I could tell you how monumental it is for hours, but it’s something that should really be experienced. Black, Brown, and Beige Influencers have often led mainstream culture from a perspective of style, music, and entertainment. What’s cool is defined by young Black, Brown, and Beige people, but they don’t get the credit for it. So, we’re excited to these ‘cool kids’…these influencers… these cultural leaders, and they’re interacting with each other, uniquely contributing to society,” he said.
He continued, “I think this is one of the most exciting things [at SoLA], and it’s happening in South Central! We’re just bringing these people together, but now the challenge is how do we empower them and enable them to own their own intellectual properties? How do we allow them to really financially benefit from the fact that they're the leaders in some of these trends and some of these movements? And so, I think we've figured out part one, which is let's just bring them together.”
Doing Well By Doing Good. Words not just said but put into action.
For more information on SoLa Impact, their amazing initiatives and projects, or Martin Muoto visit: https://solaimpact.com.